Aiming to see more Israeli money invested in Israeli innovation, the Finance Ministry published a tender on Sunday for the establishment of four new hi-tech investment funds, to be listed on the Tel Aviv Stock Exchange.
As part of the tender, launched together with the Israel Securities Authority, the Accountant General's Office will be selecting four mutual fund managers, who will be responsible for registering the participating units of the funds – at a minimum of NIS 400 million – on the stock exchange. Investors in the funds will receive state protection against losses, as well as guarantees for raising credit, according to the Finance Ministry.
"The new funds combine two important goals of the Finance Ministry – opening a new investment channel for those saving for retirement, alongside a new source of capital for the Israeli hi-tech industry," said Finance Minister Moshe Kahlon.
Today, most of the capital invested in Israeli hi-tech research and development comes from foreign sources, and many of the companies are acquired by foreign corporations at early stages of growth, a statement from the Finance Ministry explained. As a result, the Israeli capital market is often unable to "enjoy the fruits" of these companies at a mature stage, the statement added.
The new funds will be combining investments in trade-able shares of the hi-tech sector, as well as significant investments – at least 30% – in early stage companies, the Finance Ministry said. For each fund that meets the terms of the tender, the government will be providing backup of up to NIS 50m., according to the ministry. In addition, the ministry said that the funds will be able to raise credit backed by state guarantees of up to NIS 100m. per fund.
"Our proposal intends to create an investment instrument for the general public that will enable participation, for the first time, in the success of Israeli technology companies, while providing protection by the state," said Prof. Shmuel Hauser, chairman of the Israel Securities Authority. "This is another important tool we have promoted to support small businesses and technology companies."